State Board of Education approves inquiry into Winchester education spending

State education commissioner Stefan Pryor is seen during a meeting of the Connecticut Board of Education, which ruled Wednesday to launch an inquiry into the lack of funding for Winchester schools provided by the town in recent years.
Kate Hartman—Register Citizen

HARTFORD >> The state Board of Education voted Wednesday to approve a formal inquiry into whether the town of Winchester and the Winchester Board of Education underfunded the town’s schools in 2012-13.

The town and school district will have the opportunity to solve the funding issue through negotiations before a decision is made by the state board. A three-member subcommittee of the state board will have until Feb. 7 to complete its hearing on whether Winchester “failed or is unable to make reasonable provision[s] to implement the education interests of the state.”

During those 30 days, the town and school district will be able to continue talks to negotiate a settlement that the state Board of Education would then have to deem be appropriate.

The investigation into whether education was being adequately funded began in October when Superintendent of Schools Thomas Danehy made a complaint to the state Board of Education. Danehy said at the time that schools would be closed in December because the district wouldn’t be able to make payroll. But a loan approved by the town prevented that.

Advertisement

Meanwhile, state education officials conducted an investigation and reported its results in December.

After receiving the report, state education commissioner Stefan Pryor recommended to the board that an inquiry be made. A state report found that Winchester paid funds in 2013-14 to cover expenses from the 2012-13 fiscal year, leaving the school district short of the state mandated minimum budget requirement of $19,958,149 for the 2012-13 school year. The investigators found the town only funded $18.3 million of the budget in 2012-13.

The state also said the town “exhibited an undue degree of control,” over the Winchester board’s expenditures during the 12-13 fiscal year by directing the board on “which vendors could be paid, the amount of funds to be paid to certain vendors and the timing of such expenditures.” That is a violation of state law, which says only the board of education in a town can control education expenditures.

During the state Board of Education meeting at the Legislative Office Building in Hartford on Wednesday, state education officials presented the report to the board, who voted unanimously to approve the inquiry process.

Joseph Vrabely Jr., a member of the board, stressed the seriousness of the alleged violations.

“When you have to take your eye off the ball of educating kids because you can’t pay bills, that totally takes you off your game,” he said. “You can’t focus on what you need to focus on.”

Also at Wednesday’s meeting, town and school officials presented arguments to the board.

Town Attorney Kevin Nelligan asked that the board table the vote on the inquiry process to instead allow the two sides to meet to discuss possible solutions to the problem. He said the town has already approved a loan and supplemental tax to help the education funding issues.

“The report that’s before you indicates that many of the problems that were identified in 2012-13 fiscal year have been resolved. If they weren’t resolved, your investigators wouldn’t have found that there is no violation in the current fiscal year,” Nelligan told the board.

He was confident that the town and the school board could resolve the, “remaining issues” raised by Danehy and Winchester Board of Education Chairman Susan Hoffnagle during their public comments, on their own without an inquiry.

The superintendent and town board chairman shared with the state board concerns focused on the town’s cash flow for the future.

Hoffnagle said her biggest concern is the town’s insistence that the Winchester Board of Education curb their spending to comply with the timing of revenues.

“Although we have been appropriated $20 million, we cannot spend those funds until revenues come in because the bulk of ECS funds come in May. That would mean that fully one quarter of our budget dollars would not be available until almost June,” said Hoffnagle. “By finding no violation of the law for 2013-14, the town will feel validated in its belief that there will be no MBR violation if full amount of the MBR is funded on or before June 30.”

She asked the state board to provide guidance to the town on what it means to fully satisfy the MBR.

“It must make funds available to the BOE in a timely fashion,” Hoffnagle asserted. “This does not mean that the $20 million needs to be available on day one but rather funds must be available to pay bills as the BOE incurs them, operating in good faith of course.”

Further inquiry and possible litigation would be costly and time consuming, according to Hoffnagle. She was not in favor of it because it, “does little to enhance the educational experience of children in Winsted.”

However, she said some action needs to be taken because she believes the problems go beyond the town’s assertion that things are resolved now that there is no violation in the current fiscal year.

Danehy agreed that “problems remain,” and the “town is unwilling to allow the BOE to complete their function,” some of which stems from their restrictions on when and how the BOE can spend their funds.

He cited several assertions Nelligan made at a meeting on Monday including that, “the schools were not harmed because the bills were ultimately paid,” “there was a problem but it caused by the finance director’s fraud,” “everything is in the past and there’s no problem going forward,” and “no one is exercising control over the BOE.” Danehy disputed all of these claims saying they ignore some of the underlying issues such as, “years of zero budgets, the constant erosion of fund balances and the $1.3 million that would have to be found to correct the intentional underfunding of MBR.”

Saying that there was ultimately no impact on the schools, “rather ignores the incredible damage to our vendor relationships and the time lost defending our creditors for over a year,” said Danehy.

After the decision to approve the inquiry was made, officials from both the town and the BOE said they were pleased with the outcome. All hope to solve the funding issues before the 30 days are up.

“I think it’s a great outcome, and we look forward to continuing to work with the state Department of Education, putting all of this behind us and moving forward in the direction we appear to be moving,” said Town Manager Dale Martin.

“I think [the decision] puts us in line for an agreement that’s going to work out for everybody,” Danehy said. “I like the idea that the state’s involved to keep everybody actively engaged in the process and personally I’m thankful for the passage of the GAN referendum, the supplemental tax. It really puts the town on much better financial footing for this year but I’m still concerned about what happens next year. Part of the agreement that I’d be looking for is some kind of long term solution between the board of education and the town to make it work for everybody.”

Mayor Lisa Smith said she’s looking forward to the conference where all parties will have the opportunity to be heard and the town can move forward.

“The fact that the Board of Selectmen did the supplemental tax and the GAN note played an important part of the investigators finding no violation for 2013-14. If the supplemental tax had been sent out in 2012-13, we wouldn’t be involved with this 10-4b complaint right now,” said Smith. “We need the Board of Education to stop with the attitude that they are autonomous from the town. We need to be partnering to move Winsted forward together. The board of education budget is clearly the biggest driver of the town budget as a whole. We need better collaboration and communication.”

The state will not take any action until the two sides meet.

If a settlement cannot be negotiated, and Winchester is held responsible for underfunding the MBR, the penalty will negatively impact its finances. The town may face losing $3,331,492.22 out of its nearly $8 million state Education Cost Sharing grant for the 2014-15 fiscal year.

About the Author

Kate Hartman works as a writer for Connecticut Magazine and formerly covered the towns of Harwinton, Burlington, New Hartford, Barkhamsted and Canton for The Register Citizen. Reach the author at khartman@registercitizen.com
or follow Kate on Twitter: @CTMagKate.